Excellent Tricks to Pay Off Your Mortgage in Ten Years
Making monthly mortgage payments shouldn’t be something you do in the next 20 or even 30 years. Whether it’s your home mortgage or chattel mortgage, you need to pay it off. Why get a Chattel Mortgage or a home mortgage paid off within the next 20 years if you can pay it off within ten years. If you can pay off your mortgage ten years earlier, you can save more money in the long run. Imagine paying off your mortgage in 10 years. It’s possible with the right approach. And lucky for you, today we will explain some excellent tricks to help you achieve this goal. Read on and become mortgage-free sooner than you thought possible.
Purchase a Home Suitable for Your Budget
The first step to paying off your mortgage in a shorter period is purchasing a home suitable for your budget. That doesn’t mean buying the cheapest house on the market but being realistic about what you can afford. Don’t overstretch yourself just because you think you can make higher mortgage payments each month. It’s essential to be comfortable with your monthly mortgage payments. If you’re not, then you’re more likely to miss a payment or make a late payment, which can hurt your credit score and cost you money in the long run.
Refinance Your Mortgage to a Shorter Term
If you’ve already purchased a home and have a mortgage, you can still shorten the term of your loan by refinancing. Refinancing to a shorter term will increase your monthly payments and pay off your mortgage sooner. For example, if you have a 30-year mortgage, you can refinance to a 15-year mortgage, and you’ll be on track to pay off your mortgage in half the time. Of course, this will only work if you can afford the higher monthly payments. But if you can, it’s a great way to shorten the term of your loan. It’ll be best if you also refinance to a lower interest rate.
Focus on Hitting the Principal Early
Also, when you make your mortgage payment each month, a portion of that payment goes towards the interest, and the rest goes towards the principal. If you want to pay off your mortgage in a shorter period of time, it’s essential to focus on hitting the principal early. The best way to do this is to make bi-weekly payments instead of monthly payments. When you make bi-weekly payments, you make one extra payment each year. And that additional payment goes straight towards the principal. As a result, you’ll pay off your mortgage sooner and save money on interest in the long run.
Cut Down Your Balance With a Lump-Sum Payment
If you come into some extra money, don’t spend it all. Instead, use that money to make a lump-sum payment on your mortgage. For example, let’s say you receive a $20,000 inheritance. You can use that money to make a lump-sum payment on your mortgage and reduce your balance by $20,000. As a result, you’ll pay off your mortgage sooner and save money on interest in the long run. The right mindset saves you years of mortgage payments.
Making extra monthly payments is a great way to pay off your mortgage sooner. But if you want to accelerate the process, you can make bi-weekly or even weekly payments. Doing so will help you shave years off your mortgage and save you a ton of money in interest. After all, the sooner you pay off your mortgage, the better. Not only will you be debt-free sooner, but you’ll also have more money each month to save or invest. So if you’re looking to become mortgage-free as soon as possible, these are some excellent tricks to help you achieve that goal.